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2009-3-18 11:16:00 a.m. HKT, XFNA
DJ MARKET TALK: Nine Dragons +3.2%;But CS Perplexed By Acctg Move
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| 1055 [Dow Jones] Nine Dragons Paper (2689.HK) +3.2% at HK$2.58, as business update seems to indicate worst likely over for China's largest containerboard maker; volume unexciting at HK$11.5 million, immediate cap at Tuesday's peak of HK$2.62. However, Credit Suisse says it's "perplexed" by NDP's "rare and unusual" accounting treatment on underutilized capacity; notes company explains big discrepancy in its, house's estimated capacity utilization rates in 2H08 caused by different definitions of effective and total production time, which should have positive impact on P&L; says treatment makes NDP's P&L, earnings based metrics not useful for ordinary analysis, comparison. CS keeps stock at Underperform, but raises fiscal year ending June 30 EPS forecast by 50% and increases target price by 9% to HK$1.72 due to one-off gain from note buyback. But cuts fiscal FY10-11 EPS forecasts by 23% each on lower selling price, volume assumptions. (RLI) Contact us in Hong Kong. 852 2802 7002; MarketTalk@dowjones.com
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(Delayed by 1 hour)
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